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Monday, 1 February 2016

Trust is the new currency!

Three months ago I was invited by GlaxoSmithKline (GSK) to be the keynote speaker at a conference that would focus on one of the most vital topics of our times: Trust.

One of the things that was announced that day took the delegates to the conference – and myself, I might add – by surprise. The General Manager of GSK announced that his salespeople would no longer be compensated on a commission basis but on the quality of the relationships that they managed to cultivate with current and prospective customers.
This means that, from now on, GSK’s salespeople will need to act more as consultants and trusted advisors if they are to be in a position to control their income. Initially, they will embark on a string of visits in the company of their Manager, who will observe and assess the quality of the relationship they have managed to forge with each of their customers, as well as evaluating their product and market knowledge. The Manager will provide guidance to the salesperson/trusted advisor and, on their final visit, will grade her. This grade will effectively determine the advisor’s future within the organisation and, more specifically, the size of the bonus to her basic salary –large or small. One of the beauties of this system is that GSK trusted advisors may not reach their targets in terms of units sold but will still be compensated – possibly even better than before – for cultivating excellent and trusting relationships with their customers!

Are your salespeople adding value or are they adding cost?
Even though the GSK model of rewards and incentives is relatively new to Europe, more and more companies around the globe have been using a similar model in order to bring out the best of their salespeople. Lounic, a leader in the FMCG (Fast-Moving Consumer Goods) industry is a company that I have been privileged to work with on training, consulting and development and it has been using a similar method to GSK for some time. According to Loucas Christodoulou, the firm’s Managing Director, the outcome has been extremely positive for salespeople and customers alike.
Irrespective of how different your particular model of compensation may be from the one that GSK or Lounic are using to reward their salespeople, your goal should be to cultivate and create a sales force of individuals who will add value to their customers’ businesses as well as to yours. If your salespeople are not adding daily value to your organisation, you can be sure that they are adding cost.

Trust is the new currency!

My experience over the last 15 years has shown me that there are four (4) simple steps that your salespeople can take to become not only trusted advisors but also value contributors to your customers and to your organisation.

Step 1: Listen to the customer
Last year I had the good fortune to cooperate with Kardex , a billion-dollar company listed on the Swiss stock exchange. The man who hired me – Demetris Koulountis, the firm’s Regional Director – told me that his success was based on the fact that he always walked into the first meeting with a new customer without having any of his company’s leaflets and brochures on him. Why? “The first meeting,” he said, “is all about the customer. Successful salespeople do not barge in and try to take over. They arrive as trusted advisors, trying to make sense of their prospective customer’s needs and wants before even thinking about suggesting any of their own products. If possible, they will lay the foundations for building a relationship with him or her.” Mr. Koulountis added that, in his view, “people buy people” and in his 30 years of experience this parameter has not changed even slightly. Successful salespeople, like Kardex’s Regional Manager, understand that empathic listening and scrupulous note-taking are more important than hard selling and impulsive discounting.

Step 2: Aim to create value for the customer
In 2011 I came across a bar that was very different from those I had experienced in hotels during my travels all over the world. It was on Fifth Avenue in New York City and it was called a “Genius Bar”. Unlike other bars, this one dispensed advice instead of alcohol! It was Apple’s attempt to create a significant competitive advantage over its competitors and I don’t mind admitting that the “Genius Bar” succeeded in turning me into a loyal Apple customer. I am typing this newsletter on a MacBook Air, it is being saved automatically on an Apple Time Capsule and my iPhone is ringing in the background reminding me that it is time for a break (today, 25 March, is a bank holiday in my country!). The “Genius Bar” was a successful attempt to raise expectations and delight customers by giving them way more than they hoped for. Successful salespeople also need to act like geniuses since those are the people who meticulously study their competition, invest hundreds of hours in ‘getting acquainted’ with their products and services and keeping abreast with the latest developments in their industry. Only then are they able to dispense the right kind of information and advice that is crucial for their customers to take a buying decision. Successful salespeople understand that price does not build relationships. Trusted advisors do.

Step 3: Speak to and from the heart
There is no denying that the so-called Millennials live much of their lives staring at their smartphone screens. They will even be found ‘checking in’ on Facebook and whichever social media channels they choose whilst at the dinner table with family and friends. They post pictures of almost everything that catches their eye and their imagination – and yet the majority of restaurants that I have visited still choose to have password-protected Wi-Fi! As the mobile phone becomes ever more ingrained in our daily lives, why do so many business fail to differentiate themselves by offering their customers password-free Wi-Fi? The establishments that miss out on the opportunity to make their customers’ lives easier lose not only time (responding to customers’ requests for Wi-Fi access – as I and many others did today at the restaurant we chose to visit for lunch with the family) but also the opportunity to extend their brand’s outreach and reputation if customers mention that they are currently at a particular place of business. More importantly, they miss out on touching their customers’ hearts by making the overall dining experience seamless and pleasant. Successful salespeople understand that people buy emotionally and then justify their purchase rationally. So you should aim at your customer’s heart, surprising and delighting him at every turn. Successful salespeople take a lot of notes during meetings with customers and subsequently make a point of seeing that all the notes are summed up (in an offer, a report or a proposal) in the very words used by the customer. They will follow up the meeting with a “thank you” e-mail, which not only differentiates them from their competitors but invariably delights and surprises the customer. They will never insist on telling customers “We are the best”. Actions, not words, are what will convince them of this.

Step 4: Sacrifice the customer, not the relationship
My wife Christine has just been appointed Human Resources Partner with a prestigious global company. With such companies come benefits and incentives, one of which, in this case, is the provision of free medical insurance for the whole family. When she presented me with the all-inclusive medical insurance policy which was just as good as our existing one, I decided to call my insurance agent to let him know that I was weighing my options and considering stopping my current plan. He went crazy! He tried to camouflage the fact that he was threatening me by pretending that he was, in fact, advising me. He told me, for example, that if I stopped the policy and decided to renew it at a later date, I would not be able to enjoy all the benefits I had now. He made no attempt to put himself in my shoes and look at how I would benefit from the change of insurance provider but simply panicked at the thought of losing me as a customer and, most probably, his commission too. However, I am pleased to report that, when I presented the case to his Manager, I found not only a sympathetic ear but a far more relaxed and understanding attitude. He started by saying that he would reimburse my already paid annual premium as soon as I decided to terminate the plan and he added that he wanted the best for me and would be in a position to understand the situation once he had taken a look at Christine’s new company medical insurance scheme. He later got back to me and acknowledged that it was in some aspects better than his. He drew my attention to three basic parameters that I had to take into consideration. Having carefully considered them, I ended up downgrading my medical insurance but staying on as his customer. The Manager knows that his company will receive less money from me this year but, by acting as a trusted advisor, he not only added value to his company (unlike my insurance agent) by keeping me on board but he also preserved a six-year relationship. Successful salespeople go to great extremes to protect the relationship, even if this means losing the customer in the process.

It is easy to think that price and cost issues are the only ones we need to take care of, especially when times are tough. However, the best investments are usually long-term and there is no better investment for a company to make than in its people and its customers. The word ‘trust’ may not appear on any balance sheet but the concept can make all the difference between success and failure. In the end, it’s all about trust.